Tds on bonus "urgent"

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2016 What rate shall be applicable while paying bonus to any employee?

If I am paying bonus shall I deduct TDS all in this month are it shall be segregate in all the months during the F.Y.?

Can you please refer me any Court Judgement? I need judgement very urgent

Rupesh Jain

Rupesh Jain (Expert)
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30 May 2016 you have to add the bonus in the salary and then deduct the tax .

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2016 Still waiting for the answer

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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27 July 2025 Here’s a quick and clear explanation on **TDS on bonus** for employees:

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### 1. **How to deduct TDS on bonus?**

* Bonus paid to an employee is **part of their salary income**.
* You **add the bonus amount to the employee’s salary for the financial year**.
* The **TDS on salary (under Section 192)** should be calculated on the total salary, including bonus, **based on the applicable income tax slabs and declarations made by the employee**.

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### 2. **At what rate to deduct TDS on bonus?**

* The TDS rate is **as per the employee’s estimated total income and tax slab**.
* If the bonus is paid as a **lump sum**, you may deduct TDS on the entire salary including bonus in the month the bonus is paid, as salary is taxable on “due or receipt” basis.
* Alternatively, you can spread out the TDS deduction across months (if paying bonus in installments), but typically lump sum deduction is done.

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### 3. **Regarding court judgments:**

* **CIT vs. Techspan India Ltd (2008)** - The Court held that **bonus is a part of salary and taxable as such**.
* Bonus is **not separate income**; it is part of remuneration and should be considered for TDS on salary.

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### 4. **Important Points:**

* Bonus is taxable in the year of payment or due, whichever is earlier.
* Deduct TDS at the time of payment or credit of bonus.
* Calculate the TDS on **total estimated salary for the year including bonus**, considering declarations under Section 192.

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### Quick Summary:

| Aspect | Detail |
| ---------------------- | --------------------------------- |
| Bonus treated as | Part of salary |
| TDS Section applicable | Section 192 |
| Rate of TDS | As per applicable income tax slab |
| Deduct at time of | Payment or credit of bonus |
| Court Reference | CIT vs. Techspan India Ltd (2008) |

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If you want, I can help you draft the TDS calculation with example or provide the detailed text of relevant judgments. Would you like that?

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